The NBS is scheduled to announce the November inflation rate on December 15. Our econometric model is projecting that official headline inflation will decline again by 0.79% to 15.2%. Our survey of Lagos markets showed that the prices of staple food items fell sharply by an average of 22.46% in the last year. For example, a basket of tomatoes is selling for N20k (2020: N35k), onions – N45k (2020: N80k) whilst the price of rice and pepper remained flat. The general tapering of food prices is mainly as a result of harvests but also partly due to price resistance by financially embattled Nigerian consumers.
Commodity prices falling – How Sustainable?
In spite of the slight moderation in inflation, consumers are jittery about the possible impact of an increase in the price of petrol to N340 per litre in February. Also more scary is the fact that the price of cooking gas has remained stubbornly high at N10,200 per cylinder and diesel is selling for N345/litre (N195/litre in 2020). Inflation is likely to remain elevated in the early part of 2022 before moderating towards the end of the year when the productivity gains from some infrastructure initiatives would have kicked in.
In the download, the FDC Think Tank shares its estimates for November inflation and likely policy reactions.
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